Self-Regulatory Organizations; National Association of Securities Dealers; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Related to Proactive Limit Orders, 57636-57638 [E5-5346]
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57636
Federal Register / Vol. 70, No. 190 / Monday, October 3, 2005 / Notices
amended its Rule 196 to eliminate the
drop requirement.3
DTC believes that the elimination of
the NYSE’s drop requirement will result
in a most transfer agents withdrawing
from DTC’s Drop Service. Also, in light
of an industry-wide move to
dematerialize securities holdings, DTC
seeks to discourage the use of physical
certificates by eliminating processing
facilities that makes the use of
certificates easier. Therefore, because
the Drop Service no longer serves a need
for DTC participants and termination of
the Drop Service will assist in furthering
industry initiatives to discontinue the
use of physical certificates, DTC will no
longer provide the Drop Service
effective September 1, 2005.
DTC believes that the proposed rule
change is consistent with the
requirements of Section 17A of the Act 4
and the rules and regulations
thereunder applicable to DTC because it
will discourage the use of inefficient
and outdated securities transfer
methods and services and as such will
promote the prompt and accurate
clearance and settlement of securities
transactions. Furthermore, the proposed
rule change will not adversely affect the
safeguarding of securities and funds in
DTC’s control or custody or for which
it is responsible.
(B) Self-Regulatory Organization’s
Statement on Burden on Competition
DTC does not believe that the
proposed rule change will impose any
burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act.
(C) Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments relating to the
proposed rule change have been
solicited or received. DTC will notify
the Commission of any written
comments received by the DTC.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective upon filing pursuant to Section
19(b)(3)(A)(iii) of the Act 5 and Rule
19b–4(f)(4) 6 thereunder because it is
effecting a change in an existing service
of a registered clearing agency that does
not adversely affect the safeguarding of
3 Exchange Act Release No. 51973 (July 5, 2005),
70 FR 40094 (July 12, 2005), File No. SR–NYSE–
2004–62.
4 15 U.S.C. 78q–1.
5 15 U.S.C. 78s(b)(3)(A)(iii).
6 17 CFR 240.19b–4(f)(4).
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securities or funds in the custody or
control of the clearing agency or for
which it is responsible and does not
significantly affect the respective rights
or obligations of the clearing agency or
persons using the service. At any time
within sixty days of the filing of such
rule change, the Commission may
summarily abrogate such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act.
Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–DTC–
2005–13 and should be submitted on or
before October 24, 2005.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
BILLING CODE 8010–01–P
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml) or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–DTC–2005–13 on the
subject line.
For the Commission by the Division of
Market Regulation, pursuant to delegated
authority.7
Jonathan G. Katz,
Secretary.
[FR Doc. E5–5344 Filed 9–30–05; 8:45 am]
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–52511; File No. SR–NASD–
2005–113]
Self-Regulatory Organizations;
National Association of Securities
Dealers; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Related to Proactive Limit
Orders
September 27, 2005.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
Paper Comments
notice is hereby given that on
• Send paper comments in triplicate
September 22, 2005, the National
to Jonathan G. Katz, Secretary,
Association of Securities Dealers, Inc.
Securities and Exchange Commission,
(‘‘NASD’’), through its subsidiary, The
100 F Street, NE., Washington, DC
Nasdaq Stock Market, Inc. (‘‘Nasdaq’’),
20549–9303.
filed with the Securities and Exchange
All submissions should refer to File
Commission (‘‘Commission’’) the
Number SR–DTC–2005–13. This file
proposed rule change as described in
number should be included on the
subject line if e-mail is used. To help the Items I and II below, which Items have
been prepared by Nasdaq. Pursuant to
Commission process and review your
Section 19(b)(3)(A) of the Act 3 and Rule
comments more efficiently, please use
4
only one method. The Commission will 19b–4(f)(6) thereunder, Nasdaq has
designated the proposed rule change as
post all comments on the Commission’s
non-controversial, and therefore the
Internet Web site (https://www.sec.gov/
proposed rule change is effective upon
rules/sro.shtml). Copies of the
filing. The Commission is publishing
submission, all subsequent
this notice to solicit comments on the
amendments, all written statements
proposed rule change from interested
with respect to the proposed rule
persons.
change that are filed with the
Commission, and all written
I. Self-Regulatory Organization’s
communications relating to the
Statement of the Terms of the Substance
proposed rule change between the
of the Proposed Rule Change
Commission and any person, other than
Nasdaq proposes to create a voluntary
those that may be withheld from the
proactive limit order type that, if locked
public in accordance with the
or crossed by another accessible market
provisions of 5 U.S.C. 552, will be
center, will automatically be routed to
available for inspection and copying in
that market center for potential
the Commission’s Public Reference
execution. Nasdaq intends to implement
Section, 100 F Street, NE., Washington,
the proposed rule change promptly and
DC 20549. Copies of such filings also
will be available for inspection and
7 17 CFR 200.30–3(a)(12).
copying at the principal office of DTC
1 15 U.S.C. 78s(b)(1).
and on DTC’s Web site, https://
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
www.dtcc.com. All comments received
4 17 CFR 240.19b–4(f)(6).
will be posted without change; the
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Federal Register / Vol. 70, No. 190 / Monday, October 3, 2005 / Notices
will inform market participants of the
exact implementation date via a Head
Trader Alert on https://
www.nasdaqtrader.com.
The text of the proposed rule change
is below. Proposed new language is in
italics; proposed deletions are in
brackets.
*
*
*
*
*
4701. Definitions
Unless stated otherwise, the terms
described below shall have the
following meaning:
(a) through (uu) No Change.
(vv) The term ‘‘Proactive’’ shall mean,
for priced limit orders so designated,
that if marketable upon entry into the
Nasdaq Market Center, the order will
first attempt to execute in the Nasdaq
Market Center and thereafter be sent to
available external execution venues
until it is fully executed or no longer
marketable. The order will thereafter be
added to the Nasdaq Market Center
Book. Once on the book, if another
accessible execution venue displays an
order that locks or crosses the Proactive
Limit Order, the order will be removed
from the Nasdaq Market Center book
and routed to that locking or crossing
execution venue for potential execution.
*
*
*
*
*
4706. Order Entry Parameters
(a) Non-Directed Orders—
(1) General. The following
requirements shall apply to NonDirected Orders Entered by Nasdaq
Market Center Participants:
(A) A Nasdaq Market Center
Participant may enter into the Nasdaq
Market Center a Non-Directed Order in
order to access the best bid/best offer as
displayed in Nasdaq and other markets
as set out in Rule 4714.
(B) A Non-Directed Order must be a
market or limit order, must indicate
whether it should be not routed to
another market in accordance with Rule
4714, whether it is a buy, short sale,
short-sale exempt, or long sale, and may
be designated as ‘‘Immediate or Cancel’’,
‘‘Day’’, ‘‘Good-till-Cancelled’’, ‘‘AutoEx’’, ‘‘Fill or Return’’, ‘‘Pegged’’,
‘‘Discretionary’’, ‘‘Sweep’’, ‘‘Total Day’’,
‘‘Total Good till Cancelled’’, [or] ‘‘Total
Immediate or Cancel[,]’’, [or]
‘‘Summary[.]’’, or ‘‘Proactive’’.
(i) through (xiii) No change.
(xiv) A limit order may be designated
as ‘‘Proactive,’’ in which case the order
shall be designated as Day, GTC, X, or
GTX. A Proactive Order that is
marketable upon entry into the Nasdaq
Market Center will first attempt to
execute in the Nasdaq Market Center
and thereafter be sent to available
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17:26 Sep 30, 2005
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external execution venues until it is
fully executed or no longer marketable.
The order will thereafter be added to the
Nasdaq Market Center book. Once on
the book, if another accessible execution
venue displays an order that locks or
crosses the Proactive Limit Order, the
order will be removed from the Nasdaq
Market Center book and routed to that
locking or crossing execution venue for
potential execution.
(C) through (F) No Change.
(2) No Change.
(b)–(e) No Change.
*
*
*
*
*
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
Nasdaq included statements concerning
the purpose of and basis for the
proposed rule change and discussed any
comments it received on the proposed
rule change. The text of these statements
may be examined at the places specified
in Item IV below. Nasdaq has prepared
summaries, set forth in Sections A, B,
and C below, of the most significant
aspects of such statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Nasdaq is proposing to implement the
Proactive Order, an order option that
will allow Nasdaq users to enter limit
order(s) that execute against interest
posted on the Nasdaq Market Center
book, are posted on the book, and then
are routed to another available market
center if the limit order’s price is locked
or crossed by that market center.
Currently, limit orders in the Nasdaq
Market Center that are locked or crossed
by other market centers remain inside
the Nasdaq system and are not routed
based on their price being locked or
crossed. Under this proposal, users
would have the option of directing that
if their limit orders posted on the book
subsequently become locked or crossed
by prices displayed in another market
center, the orders will be routed to the
locking/crossing market center for
potential execution. Specifically, the
process would operate as follows:
If marketable upon entry, the order
will be executed either internally in the
Nasdaq Market Center or routed to
available external execution venues
until it is fully executed or no longer
marketable. The order will thereafter be
added to the Nasdaq Market Center
Book. Once on the book, if another
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57637
accessible execution venue displays an
order that locks or crosses the Proactive
Limit Order, the order will be removed
from the Nasdaq Market Center book
and routed to that locking or crossing
execution venue for potential execution.
This proactive routing capability shall
be available as an option on all Nasdaq
Market Center order types that are
eligible for routing to other execution
venues.
Nasdaq notes that a similar order
functionality is already offered by
Nasdaq’s Brut Facility as a Super
Aggressive Cross Order.5 Nasdaq also
believes that this functionality will
reduce the incidence and duration of
locked or crossed markets and improve
the quality of executions for Nasdaq
Market Center users. Because of the
similarities between the proposed
functionality and orders already in use
in the marketplace as well as the
important market quality benefits the
functionality provides, Nasdaq requests
that the Commission waive the 30-day
pre-operative waiting period contained
in Rule 19b–4(f)(6)(iii) under the Act.6
2. Statutory Basis
Nasdaq believes that the proposed
rule change is consistent with the
provisions of Section 15A of the Act,7 in
general, and with Section 15A(b)(6) of
the Act,8 in particular, in that it is
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, remove impediments to a free and
open market and a national market
system, and, in general, to protect
investors and the public interest. In
particular, the proposal will limit the
length of locked or crossed markets and
improve the quality of executions for all
Nasdaq Market Center participants.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
Nasdaq does not believe that the
proposed rule change will result in any
burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
Written comments were neither
solicited nor received.
5 See
NASD Rule 4903(b)(1)(C).
CFR 240.19b–4(f)(6)(iii).
7 15 U.S.C. 78o–3.
8 15 U.S.C. 78o–3(b)(6).
6 17
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57638
Federal Register / Vol. 70, No. 190 / Monday, October 3, 2005 / Notices
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate if
consistent with the protection of
investors and the public interest, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 9 and Rule 19b–
4(f)(6) thereunder.10
Nasdaq has requested that the
Commission waive the 30-day operative
delay. The Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest
because the proposed change rule
would permit Nasdaq to implement an
order type similar to one already in use
in the marketplace that may offer market
quality benefits. Therefore, the
Commission designates the proposal to
be effective and operative upon filing
with the Commission.11
At any time within 60 days of the
filing of the proposed rule change, the
Commission may summarily abrogate
such rule change if it appears to the
Commission that such action is
necessary or appropriate in the public
interest, for the protection of investors,
or otherwise in furtherance of the
purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–NASD–2005–113 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Jonathan G. Katz, Secretary,
Securities and Exchange Commission,
9 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
11 For purposes of waiving the 30-day operative
delay, the Commission has considered the proposed
rule’s impact on efficiency, competition, and capital
formation. 15 U.S.C. 78c(f).
10 17
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17:26 Sep 30, 2005
Jkt 205001
Station Place, 100 F Street, NE.,
Washington, DC 20549–9303.
All submissions should refer to File
Number SR–NASD–2005–113. This file
number should be included on the
subject line if e-mail is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for inspection and copying in
the Commission’s Public Reference
Room. Copies of the filing also will be
available for inspection and copying at
the principal office of the NASD. All
comments received will be posted
without change; the Commission does
not edit personal identifying
information from submissions. You
should submit only information that
you wish to make available publicly.
All submissions should refer to File
Number SR–NASD–2005–113 and
should be submitted on or before
October 24, 2005.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.12
Jonathan G. Katz,
Secretary.
[FR Doc. E5–5346 Filed 9–30–05; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–52515; File No. SR–NASD–
2005–106]
Self-Regulatory Organizations;
National Association of Securities
Dealers, Inc.; Notice of Filing of
Proposed Rule Change by National
Association of Securities Dealers, Inc.
Regarding Fees for Closed-End Funds
Listing on The Nasdaq SmallCap
Market
September 27, 2005.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
12 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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notice is hereby given that on August
31, 2005, the National Association of
Securities Dealers, Inc. (‘‘NASD’’),
through its subsidiary, The Nasdaq
Stock Market, Inc. (‘‘Nasdaq’’), filed
with the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which Items
have been prepared by the Nasdaq. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Nasdaq proposes to amend NASD
Rules 4510 and 4520. The text of the
proposed rule change is below.
Proposed new language is italicized;
proposed deletions are in [brackets].
*
*
*
*
*
4510. The Nasdaq National Market
(a)–(c) No change.
(d) Annual Fee—American Depositary
Receipts (ADRs) and Closed-End Funds.
(1)–(3) No change.
(4) For the purpose of determining the
total shares outstanding, fund sponsors
may aggregate shares outstanding of all
Closed-End Funds in the same fund
family listed in The Nasdaq National
Market or The Nasdaq SmallCap
Market, as shown in the issuer’s most
recent periodic reports required to be
filed with the appropriate regulatory
authority or in more recent information
held by Nasdaq. The maximum annual
fee applicable to a fund family shall not
exceed $75,000. For purposes of this
rule, a ‘‘fund family’’ is defined as two
or more Closed-End Funds that have a
common investment adviser or have
investment advisers who are ‘‘affiliated
persons’’ as defined in Section 2(a)(3) of
the Investment Company Act of 1940, as
amended.
(5)–(6) No change.
(e) No change.
4520. The Nasdaq SmallCap Market
(a) Entry Fee.
(1)–(2) No change.
(3) A closed-end management
investment company registered under
the Investment Company Act of 1940, as
amended (a ‘‘Closed-End Fund’’), that
submits an application for inclusion of
securities in The Nasdaq SmallCap
Market shall pay to the Nasdaq Stock
Market, Inc. an entry fee of $5,000 (of
which $1,000 represents a nonrefundable, application fee).
([3]4) The Board of Directors of The
Nasdaq Stock Market, Inc. or its
designee may, in its discretion, defer or
E:\FR\FM\03OCN1.SGM
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]]>Agencies
[Federal Register Volume 70, Number 190 (Monday, October 3, 2005)]
[Notices]
[Pages 57636-57638]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-5346]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-52511; File No. SR-NASD-2005-113]
Self-Regulatory Organizations; National Association of Securities
Dealers; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change Related to Proactive Limit Orders
September 27, 2005.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on September 22, 2005, the National Association of Securities Dealers,
Inc. (``NASD''), through its subsidiary, The Nasdaq Stock Market, Inc.
(``Nasdaq''), filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by Nasdaq. Pursuant to Section
19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(6) thereunder,\4\ Nasdaq
has designated the proposed rule change as non-controversial, and
therefore the proposed rule change is effective upon filing. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change
Nasdaq proposes to create a voluntary proactive limit order type
that, if locked or crossed by another accessible market center, will
automatically be routed to that market center for potential execution.
Nasdaq intends to implement the proposed rule change promptly and
[[Page 57637]]
will inform market participants of the exact implementation date via a
Head Trader Alert on https://www.nasdaqtrader.com.
The text of the proposed rule change is below. Proposed new
language is in italics; proposed deletions are in brackets.
* * * * *
4701. Definitions
Unless stated otherwise, the terms described below shall have the
following meaning:
(a) through (uu) No Change.
(vv) The term ``Proactive'' shall mean, for priced limit orders so
designated, that if marketable upon entry into the Nasdaq Market
Center, the order will first attempt to execute in the Nasdaq Market
Center and thereafter be sent to available external execution venues
until it is fully executed or no longer marketable. The order will
thereafter be added to the Nasdaq Market Center Book. Once on the book,
if another accessible execution venue displays an order that locks or
crosses the Proactive Limit Order, the order will be removed from the
Nasdaq Market Center book and routed to that locking or crossing
execution venue for potential execution.
* * * * *
4706. Order Entry Parameters
(a) Non-Directed Orders--
(1) General. The following requirements shall apply to Non-Directed
Orders Entered by Nasdaq Market Center Participants:
(A) A Nasdaq Market Center Participant may enter into the Nasdaq
Market Center a Non-Directed Order in order to access the best bid/best
offer as displayed in Nasdaq and other markets as set out in Rule 4714.
(B) A Non-Directed Order must be a market or limit order, must
indicate whether it should be not routed to another market in
accordance with Rule 4714, whether it is a buy, short sale, short-sale
exempt, or long sale, and may be designated as ``Immediate or Cancel'',
``Day'', ``Good-till-Cancelled'', ``Auto-Ex'', ``Fill or Return'',
``Pegged'', ``Discretionary'', ``Sweep'', ``Total Day'', ``Total Good
till Cancelled'', [or] ``Total Immediate or Cancel[,]'', [or]
``Summary[.]'', or ``Proactive''.
(i) through (xiii) No change.
(xiv) A limit order may be designated as ``Proactive,'' in which
case the order shall be designated as Day, GTC, X, or GTX. A Proactive
Order that is marketable upon entry into the Nasdaq Market Center will
first attempt to execute in the Nasdaq Market Center and thereafter be
sent to available external execution venues until it is fully executed
or no longer marketable. The order will thereafter be added to the
Nasdaq Market Center book. Once on the book, if another accessible
execution venue displays an order that locks or crosses the Proactive
Limit Order, the order will be removed from the Nasdaq Market Center
book and routed to that locking or crossing execution venue for
potential execution.
(C) through (F) No Change.
(2) No Change.
(b)-(e) No Change.
* * * * *
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, Nasdaq included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. Nasdaq has prepared summaries, set forth in Sections A,
B, and C below, of the most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
Nasdaq is proposing to implement the Proactive Order, an order
option that will allow Nasdaq users to enter limit order(s) that
execute against interest posted on the Nasdaq Market Center book, are
posted on the book, and then are routed to another available market
center if the limit order's price is locked or crossed by that market
center.
Currently, limit orders in the Nasdaq Market Center that are locked
or crossed by other market centers remain inside the Nasdaq system and
are not routed based on their price being locked or crossed. Under this
proposal, users would have the option of directing that if their limit
orders posted on the book subsequently become locked or crossed by
prices displayed in another market center, the orders will be routed to
the locking/crossing market center for potential execution.
Specifically, the process would operate as follows:
If marketable upon entry, the order will be executed either
internally in the Nasdaq Market Center or routed to available external
execution venues until it is fully executed or no longer marketable.
The order will thereafter be added to the Nasdaq Market Center Book.
Once on the book, if another accessible execution venue displays an
order that locks or crosses the Proactive Limit Order, the order will
be removed from the Nasdaq Market Center book and routed to that
locking or crossing execution venue for potential execution. This
proactive routing capability shall be available as an option on all
Nasdaq Market Center order types that are eligible for routing to other
execution venues.
Nasdaq notes that a similar order functionality is already offered
by Nasdaq's Brut Facility as a Super Aggressive Cross Order.\5\ Nasdaq
also believes that this functionality will reduce the incidence and
duration of locked or crossed markets and improve the quality of
executions for Nasdaq Market Center users. Because of the similarities
between the proposed functionality and orders already in use in the
marketplace as well as the important market quality benefits the
functionality provides, Nasdaq requests that the Commission waive the
30-day pre-operative waiting period contained in Rule 19b-4(f)(6)(iii)
under the Act.\6\
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\5\ See NASD Rule 4903(b)(1)(C).
\6\ 17 CFR 240.19b-4(f)(6)(iii).
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2. Statutory Basis
Nasdaq believes that the proposed rule change is consistent with
the provisions of Section 15A of the Act,\7\ in general, and with
Section 15A(b)(6) of the Act,\8\ in particular, in that it is designed
to prevent fraudulent and manipulative acts and practices, to promote
just and equitable principles of trade, remove impediments to a free
and open market and a national market system, and, in general, to
protect investors and the public interest. In particular, the proposal
will limit the length of locked or crossed markets and improve the
quality of executions for all Nasdaq Market Center participants.
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\7\ 15 U.S.C. 78o-3.
\8\ 15 U.S.C. 78o-3(b)(6).
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B. Self-Regulatory Organization's Statement on Burden on Competition
Nasdaq does not believe that the proposed rule change will result
in any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor received.
[[Page 57638]]
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate if consistent with
the protection of investors and the public interest, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \9\ and Rule 19b-
4(f)(6) thereunder.\10\
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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-4(f)(6).
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Nasdaq has requested that the Commission waive the 30-day operative
delay. The Commission believes that waiving the 30-day operative delay
is consistent with the protection of investors and the public interest
because the proposed change rule would permit Nasdaq to implement an
order type similar to one already in use in the marketplace that may
offer market quality benefits. Therefore, the Commission designates the
proposal to be effective and operative upon filing with the
Commission.\11\
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\11\ For purposes of waiving the 30-day operative delay, the
Commission has considered the proposed rule's impact on efficiency,
competition, and capital formation. 15 U.S.C. 78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate such rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-NASD-2005-113 on the subject line.
Paper Comments
Send paper comments in triplicate to Jonathan G. Katz,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE., Washington, DC 20549-9303.
All submissions should refer to File Number SR-NASD-2005-113. This
file number should be included on the subject line if e-mail is used.
To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the submission, all subsequent amendments,
all written statements with respect to the proposed rule change that
are filed with the Commission, and all written communications relating
to the proposed rule change between the Commission and any person,
other than those that may be withheld from the public in accordance
with the provisions of 5 U.S.C. 552, will be available for inspection
and copying in the Commission's Public Reference Room. Copies of the
filing also will be available for inspection and copying at the
principal office of the NASD. All comments received will be posted
without change; the Commission does not edit personal identifying
information from submissions. You should submit only information that
you wish to make available publicly.
All submissions should refer to File Number SR-NASD-2005-113 and
should be submitted on or before October 24, 2005.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Jonathan G. Katz,
Secretary.
[FR Doc. E5-5346 Filed 9-30-05; 8:45 am]
BILLING CODE 8010-01-P
